Describe theory on discounted cash flows method

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Reference no: EM1313965

Describe theory on discounted cash flows method in Capital Budgeting

"On the one hand, sound traditional valuation models like the DCF method require well-functioning capital and products markets. On the other hand, it is no secret that the current financial and economic crises have caused the collapse or near collapse of such markets and have consequently rendered traditional valuation techniques useless. Current financial problems and the resultant failure of traditional valuation tools may also be discussed in the context of the 'chicken-or-egg' dilemma. That is, we cannot have working markets unless assets can be valued soundly; but assets cannot be valued soundly if we do not have well-functioning capital markets."
Do you agree with the above statements? Explain why yes or why no

Reference no: EM1313965

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